n NISM Certifications
XV NISM Series XV
Medium

If a company’s stock price is Rs. 500 and its EPS is Rs. 25, what is its P/E ratio?

Practice question from NISM XV Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    15

  2. 20

    Correct answer

  3. C

    25

  4. D

    10

Why this is the answer

Price-to-Earnings (P/E) ratio = Market Price per Share / Earnings Per Share = 500 / 25 = 20. This ratio indicates how much investors are willing to pay per rupee of earnings. Other options are incorrect because they miscalculate the division.

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